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Brownwood council reviews revenue updates, flags potential property tax increase in pre-budget workshop
Summary
At a June 23 pre-budget workshop the City Manager and Finance Director reported positive sales-tax and sewer-revenue revisions, but noted a roughly $700,000 pending deficit and signaled the council may use available property-tax increment (up to a 3% increase) to cover Police and Fire growth.
City Manager Marshal McIntosh and Finance Director Melanie Larose led a pre-budget workshop after the council's formal actions on June 23, reviewing revenue changes, expenditure pressures and next steps for the FY 2026/27 budget.
Larose reported revenue updates since the last budget meeting: a sales tax projection increase of $95,000; landfill gate revenue revised up $91,872 (reflecting an assumed 3% increase in outside-city customers); and a $379,963 upward adjustment to sewer revenue after auditors recommended recording unbilled receivables at year-end and a prior recording method produced a projection error. Larose said the sewer revenue entry affected straight-line projections and is now trending above previous estimates.
McIntosh and councilmembers discussed pending property tax revenue updates from the Brown County Appraisal District and asked staff to prepare calculations showing how the City might use unused increment capacity; McIntosh noted the maximum allowable annual property-tax increase is 3% and said the city has not increased its rate in the last three years. He described HB 9 impacts as a one-time effect and warned that the coming budget year will be tight.
Payroll items included a proposed 3% cost-of-living adjustment for non-civil-service employees, a 4% approved meet-and-confer increase for Fire, a pending Police meet-and-confer agreement and a proposed $60,000 increase for Police overtime. McIntosh also described a review of the Enterprise vehicle replacement strategy to identify long-term savings; he said other cities replace vehicles more frequently than Brownwood and staff will evaluate department-by-department options.
Larose briefed council on other fiscal items: projected TML Risk Pool insurance increases totaling $78,849 (Workers' Comp +1%, Liability +13%, Property +8%), a paused conversion to the InvoiceCloud payment platform while evaluating updated features from Tyler/Incode, and potential engagement of NCC Consultants to negotiate credit-card processing fees. Staff scheduled a follow-up evening budget workshop for July 14 and will deliver a proposed administrative budget and any proposed fee or rate ordinances for council consideration.
The workshop did not adopt final budget decisions; staff will return with detailed calculations, including property-tax scenarios and proposed fee adjustments.
